More of us need to rent rather than buy, so Buy to Let should be thriving; the mortgage lenders are busily promoting their BTL products and attractive rates, agents constantly seek more homes, encouraging landlords to invest in further properties, tenants are queuing up to rent, sometimes gazumping previous applicants.
Then along comes Grant Shapps, one time ‘big white hope’ for the property industry (when he was in opposition, he seemed very interested in the property market’s success) and says that UK homeowners (yes, that includes landlord investors) shouldn’t count on making money from their property as the pace of price gains slows. “Gone are the days where you buy a house for capital appreciation,” Mr Shapps said. “House prices can still go up, but they need to go up in line with or less than increases in average earnings for the long term.”
On average, house prices rose 147 per cent from 2000 to the market’s peak in October 2007, according to Nationwide Building Society. That was 11 times faster than consumer-price inflation of 13.2 per cent. Values then slumped 21 per cent by February 2009. The shortage of homes, which may reach 1 million by 2015, is helping to support prices, according Savills, while record-low interest rates have also bolstered demand, and prices. But the future doesn’t look all that orange for landlord investors, who may wonder where else they can put their money.
